Income Taxes (Tables)

12 Months Ended

Mar. 31, 2012

Components of Domestic and Foreign Income (Loss) and Provision for Current and Deferred Income Taxes

Domestic and foreign components of income (loss) before income taxes and the provision for current and deferred income taxes attributable to such income are summarized as follows:

	Yen in millions
	Fiscal year ended March 31
	2010			2011			2012
Income (loss) before income taxes:
Sony Corporation and all subsidiaries in Japan		45,290			143,917			(106,496	)
Foreign subsidiaries		(18,378	)		61,096			23,310
		26,912			205,013			(83,186	)
Income taxes — Current:
Sony Corporation and all subsidiaries in Japan		42,723			60,514			33,921
Foreign subsidiaries		36,397			57,404			74,624
		79,120			117,918			108,545
Income taxes — Deferred:
Sony Corporation and all subsidiaries in Japan		(25,589	)		365,665			2,794
Foreign subsidiaries		(39,573	)		(58,244	)		203,900
		(65,162	)		307,421			206,694
Total income tax expense		13,958			425,339			315,239

Reconciliation of Statutory Tax Rate and Effective Tax Rate

A reconciliation of the differences between the Japanese statutory tax rate and the effective tax rate is as follows:

	Fiscal year ended March 31
	2010			2011			2012
Statutory tax rate		41.0	%		41.0	%		(41.0	)%
Non-deductible expenses		10.3			1.3			4.2
Income tax credits		(18.0	)		(2.0	)		(3.6	)
Change in statutory tax rate		(4.6	)		0.9			(36.2	)
Change in valuation allowances		4.7			174.5			491.0
Change in deferred tax liabilities on undistributed earnings of foreign subsidiaries and corporate joint ventures		5.8			1.5			(21.2	)
Lower tax rate applied to life and non-life insurance business in Japan		(30.3	)		(2.8	)		(7.8	)
Foreign income tax differential		(17.6	)		(10.5	)		6.7
Adjustments to tax accruals and reserves		16.2			4.5			(15.9	)
Effect of equity in net income (loss) of affiliated companies		46.0			(2.8	)		60.0
Sony Ericsson remeasurement gain		—			—			(50.6	)
Insurance recovery tax exemptions related to the Floods		—			—			(5.2	)
Other		(1.6	)		1.9			(1.4	)
Effective income tax rate		51.9	%		207.5	%		379.0	%

Components of Deferred Tax Assets and Liabilities

The significant components of deferred tax assets and liabilities are as follows:

	Yen in millions
	March 31
	2011			2012
Deferred tax assets:
Operating loss carryforwards for tax purposes		387,982			533,912
Accrued pension and severance costs		103,674			87,871
Film costs		16,405			40,566
Warranty reserves and accrued expenses		94,065			82,842
Future insurance policy benefits		26,177			22,907
Inventory		35,989			37,431
Depreciation		35,128			39,473
Tax credit carryforwards		74,284			73,945
Reserve for doubtful accounts		8,404			5,580
Impairment of investments		33,743			34,387
Deferred revenue in the Pictures segment		19,254			21,980
Other		140,745			146,777
Gross deferred tax assets		975,850			1,127,671
Less: Valuation allowance		(473,713	)		(868,233	)
Total deferred tax assets		502,137			259,438
Deferred tax liabilities:
Insurance acquisition costs		(155,073	)		(140,190	)
Future insurance policy benefits		(62,933	)		(66,998	)
Unbilled accounts receivable in the Pictures segment		(40,469	)		(45,467	)
Unrealized gains on securities		(33,101	)		(43,831	)
Intangible assets acquired through stock exchange offerings		(32,136	)		(28,139	)
Undistributed earnings of foreign subsidiaries and corporate joint ventures		(46,261	)		(27,920	)
Other		(46,970	)		(73,399	)
Gross deferred tax liabilities		(416,943	)		(425,944	)
Net deferred tax assets (liabilities)		85,194			(166,506	)

Net Deferred Tax Assets

Net deferred tax assets (net of valuation allowance) are included in the consolidated balance sheets as follows:

	Yen in millions
	March 31
	2011			2012
Current assets — Deferred income taxes		133,059			36,769
Other assets — Deferred income taxes		300,702			100,460
Current liabilities — Other		(42,340	)		(19,236	)
Long-term liabilities — Deferred income taxes		(306,227	)		(284,499	)
Net deferred tax assets (liabilities)		85,194			(166,506	)

Reconciliation of Beginning and Ending Gross Amounts of Unrecognized Tax Benefits

A reconciliation of the beginning and ending gross amounts of unrecognized tax benefits is as follows:

	Yen in millions
	March 31
	2010			2011			2012
Balance at beginning of the fiscal year		276,627			229,228			225,120
Reductions for tax positions of prior years		(38,450	)		(39,005	)		(25,302	)
Additions for tax positions of prior years		4,816			19,947			59,159
Additions based on tax positions related to the current year		10,873			41,201			44,307
Settlements		(5,921	)		(1,478	)		(4,046	)
Lapse in statute of limitations		(1,506	)		(7,770	)		(3,807	)
Foreign currency translation adjustments		(17,211	)		(17,003	)		(7,120	)
Balance at end of the fiscal year		229,228			225,120			288,311
Total net amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate		76,125			87,497			77,925